China Accuses US of Stealing $13 Billion in Bitcoin and Raises New Geopolitical Stakes

China has publicly accused the United States of orchestrating the theft of roughly $13 billion worth of bitcoin, a claim that escalates tensions by casting a high-value crypto seizure as an act of statecraft rather than law enforcement. The allegation centers on 127,272 bitcoin taken from the LuBian mining pool in December 2020, an episode that ranks among the largest heists in cryptocurrency history.

Beijing’s National Computer Virus Emergency Response Center framed the theft as a “state-level” operation, pointing to the methodical, delayed movements of the stolen coins as evidence that a government actor — not opportunistic criminals — was behind the transfers. That technical reading is central to China’s argument: slow, cautious consolidation and subsequent custodial control fit patterns more commonly associated with state intelligence or law enforcement operations than market-style laundering.

U.S. authorities, however, say the seized bitcoin are tied to an alleged criminal enterprise led by Chen Zhi, the founder of Cambodia’s Prince Group, who was indicted in October on charges including wire fraud and money laundering. The Department of Justice in mid-October filed what it described as the largest ever forfeiture action against bitcoin in its custody, seeking to seize tens of billions of dollars in crypto connected to what prosecutors called a global “pig-butchering” scam network.

Independent blockchain analysts and firms that trace on-chain flows have linked some of the assets in U.S. custody to wallets that, according to their ledger analysis, can be traced back to the LuBian incident. Blockchain forensics firm Elliptic published analysis suggesting significant overlap between the coins seized by U.S. authorities and those stolen in 2020, an inference that underpins both the government’s civil forfeiture and China’s counterclaim.

Defense filings for Chen’s legal team have asked courts for more time to trace the assets and contest the government’s narrative, arguing investigators’ conclusions rest on assumptions rather than a fully transparent chain of custody. The U.S. has declined to explain publicly the operational details of how it obtained control of the wallets, citing investigative sensitivities. That opacity has fueled diplomatic friction: what Washington calls lawful seizure, Beijing frames as appropriation.

Beyond legal posturing, the episode exposes a strategic paradox. Cryptocurrencies were designed for decentralization and pseudonymity; yet their public ledgers allow for forensic tracing that can be wielded by states. The result is a contested terrain where forensic claims, prosecutorial power and geopolitical narratives intersect. As regulators and law enforcement worldwide grow more adept at on-chain investigations, disputes like this one will test the balance between cross-border legal cooperation, national security prerogatives and the rule of law.

For investors and policymakers the takeaway is clear: crypto is no longer only a market or a technology debate. It is a field where national security, law enforcement and diplomacy can collide in ways that reshape both policy and market confidence.